Startling statistics from the Office for National Statistics (ONS) have revealed that approximately 5.5% of the housing stock in England and Wales is “truly vacant.” This figure amounts to a staggering 1.5 million properties, which is eight times the number of homes classified as second homes, standing at 172,800.
The census data, drawn from the 2021 Census, highlights a pressing issue of housing developers and wealthy property owners holding onto vacant properties, raising questions about the effectiveness of the existing tax system in the country.
According to Andrew Wishart, a senior property economist at Capital Economics, part of the problem lies in the relatively light levy on housing compared to upfront costs. Wishart argued, “Rather than having any sort of ongoing tax on the value of homes that might nudge people away from this, we’ve got stamp duty, which discourages transactions. If you could do something on tax that makes this kind of hoarding behaviour more costly, then potentially that’s an easier thing to do than raising house-building.”
The situation is particularly pronounced in London, where the issue is most acute. The capital city boasts the highest proportion of unoccupied homes, standing at 8%. Of these, 91.6% were classified as truly vacant, while 8.4% were identified as second homes.
It is important to note that the ONS data may be influenced by behaviours during the COVID-19 pandemic, which led some people to temporarily leave major cities like London to stay with relatives over extended periods. Despite this, the ONS took measures to ask respondents where they “usually” lived when collecting the data, aiming to minimize inaccuracies.
The revelation of such a high number of truly vacant properties not only calls into question the tax system but also underscores the urgent need to address the housing crisis in England and Wales. As policymakers grapple with the issue, the data serves as a stark reminder of the substantial housing challenges facing the region.